Hi – I would like you to verify if I correctly done my BEP…
Question Answered step-by-step Hi – I would like you to verify if I correctly done my BEP… Hi – I would like you to verify if I correctly done my BEP analysis. The following numbers were taken from my production budget – I will enclose my production budget followed by questions 1 and 2 – and my BEP answers Looking forward to your assistance and explanations SEPOCTNOVDECJANFEBMARAPRMAYJUNJULAUGYEARFORECASTED UNIT SALES8080808080809090909090900ADD: PLANNED ENDING INVENTORY000000000000 TOTAL PRODUCTION REQUIRED808080808080909090909090 LESS: BEGINNING INVENTORY0 00000000000 UNITS TO BE MANUFACTURED80 80 80 80 80 80 90 90 90 90 90 90 1,020 X Cost per unit 16.916.916.916.916.916.916.916.916.916.916.916.9 TOTAL PRODUCTION COST/MONTH13521352135213521352135215211521152115211521152117238 QUESTIONS 1 AND 2 1) Calculate the break-even point in units and in dollars 2) What if the material cost of the sweater was actually $19.50 due to the increase in transportation costs and the sales for the month of August were not collected in August but in September? My ANSWERS AND CALCULATIONS 1) BREAK EVEN ANALYSIS in “Units and Dollars” Cost per unit = $16.90 Selling Price = $120 Total Variable Cost = $16.90 x $120 = $2028 Total Production Cost = $17238 Fixed Cost = $17238 -2028 = $15210 FORMULA Selling price ( Units – Varible costs) = Total Fixed Cost Taking units as common Units = ( Selling Price – Variable Costs) = Total Fixed Cost Units = Total Fixed Costs/Selling Price – Variable Cost) Contribution = Selling Price – Variable Cost $120 – $16.90 = $103.1 BREAK EVEN = $15210 Fixed Cost / 103.1 BREAK-EVEN in Units = 147.53 = 148 Units BREAK -EVEN SALES = BREAK EVEN UNIT x SELLING PRICE PER UNIT BREAK-EVEN SALES = 148 Units x 120 = $17,760 in Dollars 2) BREAK EVEN ANALYSIS IN ” Units and Dollars” Cost per unit = $19.50 Selling Price = $120 Total Variable Cost = $19.50 x $120 = $2340 Total Production Cost = $17238 Fixed Cost = $17238 -2340 = $14898 FORMULA Selling price ( Units – Varible costs) = Total Fixed Cost Taking units as common Units = ( Selling Price – Variable Costs) = Total Fixed Cost Units = Total Fixed Costs/Selling Price – Variable Cost) Contribution = Selling Price – Variable Cost $120 – $19.50 = $100.50 BREAK EVEN = $14898 Fixed Cost / 100.5 BREAK-EVEN in Units = 148.23 = 149 in Units BREAK -EVEN SALES = BREAK EVEN UNIT x SELLING PRICE PER UNIT BREAK-EVEN SALES = 149 Units x 120 = $17,880 in Dollars Accounting Business Managerial Accounting ACC MISC Share QuestionEmailCopy link Comments (0)
